The latest Quarterly Credit Conditions Monitor by the British Retail Consortium reported that business members have been impacted severely by the withdrawal or reduction of trade credit insurance.
Most respondents additionally reported that they do not believe trade credit insurers accurately assess risk levels with 74% of SMEs responding to this claim and 92% of large retailers.
An anonymous retail company commented on its survey form that trade credit insurers need to take more time to look at a business specifically instead of simply looking at the umbrella category it falls under and stating no.
The commenter continued to say that risk assessors often simply refuse coverage because it is easier than aiding the insured company.
Currently, the BRC has called for an extension on the top scheme cover period that would stretch back to April 1, 2008, which is when insurers started to reduce the amount of businesses they covered as a result of the economic downtown.
Initially the credit insurance scheme was used in April of 2009 by the Government in an effort to allow businesses to buy credit cover with their insurance providers, and extends back from Oct. ,2008 reductions.
However, the new survey from the BRC shows that 95% of all SMEs do not feel as if this time period is long enough. And that extended the eligibility time frame will help solve problems that are currently faced by SMEs.
Additionally, many retailers also believe that the scheme should be extended past Dec. 31st when it is slated to end.